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The Satyam Fiasco

The worst has happened to Satyam computers. The fourth largest IT vendor in India was going through a lean period for quite sometime but what happened today was unexpected. B. Ramalinga Raju, the founder and chairman of satyam computer has quit his post along with his brother and managing director B Rama Raju. Though the resignation was inevitable following the recent aborted acquisition of Maytas infrastructure owned by Raju’s son, the admission to major financial wrong-doings and saying his last-ditch efforts to fill the “fictitious assets with real ones” through the failed acquisition has not gone down well with India Inc.
The world economy is going through turbulent times and this is really a deadly blow to our corporate structure. After this incident, the investors would think twice before handling over projects to our software companies. The weak job market will receive deadly blows and chaos will reign throughout all sectors. So what next for Satyam?
The company could face regulatory action in the US because it is listed in the New York stock exchange. It could face both civil and criminal action in USA. Already the shares of the company took a severe beating as it slid by nearly 80% in the Bombay stock exchange. The National stock exchange has decided to remove Satyam shares from January 12. The prospect of Meryll lynch taking was also ruled out.
This rude shocker must not and should not spell doom for the thriving IT industry.